<PAGE>
 
                              Eagle Food Centers



October 7, 1997

Mr. Byron 0. Magafas                 VIA AIRBORNE EXPRESS
2224 F Canyonlands Drive             ---------------------
Maryland Heights, MO 63043

Dear Byron:

This letter is intended to define the terms of the employment offer being
proposed by Eagle Food Centers, Inc. Please recognize this is by no means an
employment agreement, but simply serves to clarify our previous discussions.

Title:              Vice President Human Resources

Reports To:         Bob Kelly, President & CEO

Effective Date:     As soon as possible.

Duties:             Responsible for all human resource and labor relations
                    functions including negotiating and administering labor
                    contracts, associate related legal matters, associate
                    training and development, compensation and benefits
                    administration, and workers compensation administration.

                    It is estimated that approximately 80% of your time will be
                    devoted to human resources/labor relations responsibilities
                    and 20% to legal matters involving associate grievances,
                    arbitrations and litigation as well as reviewing contracts
                    and other legal documents from other parts of the Company.

Salary:             $115,000

Signing Bonus:      $10,000

Annual Incentive 
Bonus Potential:    Participation in the Eagle bonus plan at the administrative
                    vice president targeted norm of thirty percent (30%) of
                    average annual salary with a maximum potential of sixty
                    percent (60%) should the Company exceed budgeted
                    expectations as defined in the plan. Payout or partial
                    payout is contingent on Company performance with final
                    determination solely vested with the Board of Directors.
                    Employment at time of payout (late March) is a prerequisite
                    for payment. First year bonus is pro-rated based on average
                    salary earned.
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Mr. Byron Magafas
Page Two
October 7, 1997
 
Stock:      Eagle will provide a stock option based on the following criteria:
 
                    Award Level:       15,000 shares
 
                    Grant Price:       The closing price on date of employment.
                       
                    Vesting Schedule:  25 % at each of the first four
                                       anniversaries of the grant and options
                                       must be exercised within ten (10) yerars
                                       of award thereof or once eligible, within
                                       thirty (30) days following terminaiton of
                                       employment.

                    Award Level:       10,000 shares on the first anniversary of
                                       employment.
                       
                    Grant Price:       Closing price on that day in 1998.
 
                    Vesting Schedule:  Same as above.
                
 
Relocation:         Eagle will provide reimbursement of all usual and customary
                    real estate fees associated with the sale of your primary
                    residence not to exceed seven (7%) of the documented sale
                    price. Packing and movement of household goods will be
                    provided in accordance with polity. Execution of the
                    physical move must be completed within six (6) months of
                    your date of hire or the terms described herein shall be
                    vacated. Relocation costs to be repaid if employment is
                    terminated by associate within six months.

Temporary Living:   $3,000 to be paid in advance to cover temporary living
                    expenses.

Househunting:       Reasonable costs of two househunting trips for yourself and
                    spouse.

Vacation:           Four weeks from start date to December 31, 1998. Four weeks
                    per calendar year thereafter.

Benefits:           Enrollment in the Eagle Food Centers, Inc. health and
                    welfare plan upon the completion of the ninety (90) day
                    eligibility period. The Company will pay for up to ninety
                    (90) days of documented COBRA contributions to assure
                    continuation of benefits throughout the eligibility period
                    as defined above. Another copy of the Eagle benefits package
                    will be mailed to you today.

Severance:          Severance Agreement attached.
<PAGE>
 
Mr. Byron Magafas
Page Three
October 7, 1997

Hopefully, you will find this summary to be acceptable. Eagle offers a great
challenge and the change to participate in an exciting turnaround effort. It
will be a pleasure working with you and I look forward to your becoming a
valuable and contributing member of the management team. Please give me a call
so we can finalize the details and answer any questions.

Very truly yours,

EAGLE FOOD CENTERS, INC.                   ACCEPTANCE:

/s/ Bob Kelly 10/6/97                      /s/ Byron O. Magafas
---------------------                      --------------------
Bob Kelly                                  Byron O. Magafas
President and CEO                          DATE:     10/16/97